Coca-Cola Eyes Russia for Growth

The Coca-Cola Company (KO - Analyst Report) along with its bottling partner Coca-Cola Hellenic Bottling Company (CCH - Snapshot Report) has planned to invest more than $3 billion over the next five years to further fuel growth in Russia.

This investment of Coca-Cola is a part of the official opening of a new bottling plant in Europe, located in the Rostov region of Russia, which is scheduled to kick off in 2012.

Besides offering job opportunities to 422 employees, Coca-Cola expects that the funds would help build new manufacturing facilities and distribution systems as well as upgrade marketing plans in Russia.

Further, the Coca-Cola Hellenic plant in the Rostov region will help the Olympic Games in Sochi to become a catalyst for economic growth in Southern Russia.

The opening of the Rostov plant is part of the successful strategy of the Coca-Cola companies. Coca-Cola has already invested more than $120 million in the plant, which is expected to have a production capacity of 450 million liters of beverages a year.

Additionally, Coca-Cola and its bottling partner Coca-Cola Hellenic are investing nearly $30 billion over the next five years to support the anticipated growth across its system. These investments range from new manufacturing facilities to new distribution systems to new marketing investments in emerging economies.

Coca-Cola is the world’s largest beverage company. The company’s portfolio features $15 billion worth of brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply and Georgia.

On July 19, Coca-Cola reported its operating earnings per share of $1.17 for the second-quarter 2011, ahead of the Zacks Consensus Estimate by a penny. It was also higher than the year-ago EPS of $1.06. Coca Cola competes with Pepsico, Inc. (PEP - Analyst Report) and currently holds a Zacks #3 Rank. On a long-term basis, we maintain a Neutral rating on the stock, which translates into a short-term Hold rating.

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